MERCK & CO., INC. | Indirect Political Spending at MERCK & CO., INC.

Status
7.10% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
MRK
Lead filer
Boston Common Asset Management
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
Resolved, The shareholders of Merck & Co., Inc. (“Merck” or “Company”) ask the Company to adopt a policy requiring that any trade association, social welfare organization, or organization organized and operated primarily to engage in political activities that seeks financial support from Merck agree to report to , at least annually, the organization’s expenditures for political activities, including the amount spent and the recipient, and that each such report be posted on Merck’s website.
For purposes of this proposal, “political activities” are (i) influencing or attempting to influence the selection, nomination, election, or appointment of any individual to a public office; or (ii) supporting a party, committee, association, fund, or other organization organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures to engage in the activities described in (i). This proposal does not encompass lobbying spending.
Supporting statement
Supporting Statement
As long-term Merck shareholders we support transparency and accountability in corporate electoral spending, including the indirect political spending that is the subject of this proposal. Misaligned or non- transparent funding creates reputational risk that can harm shareholder value. It can also place a company in legal jeopardy. Unless a company knows which candidates and political causes its funds ultimately support, it cannot assure shareholders, employees, or other stakeholders that its spending aligns with core values, business objectives, and policy positions. Without the information requested by this resolution, none of the board, senior management, or shareowners can assess the risks associated with political spending.
The risks are especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support. The Conference Board’s 2021 “Under a Microscope” report details these risks, discusses how to effectively manage them, and recommends the process suggested in this proposal.
Media coverage amplifies the risk a company’s blind spending can pose and contributions to third-party groups can also embroil companies in scandal. Public records show Merck has contributed at least $1.3 million in corporate funds to third-party groups dating to the 2020 election cycle. Beneficiaries of this spending have been tied to attacks on voting rights, which we believe run counter to Merck’s stated values.
It is unclear whether the Company and its board received sufficient information from these groups to assess (a) the potential risks for Merck and stockholders, and (b) whether the groups’ expenditures aligned with Merck’s core values, business objectives, and policy positions.
Mandating reports from third-party groups receiving Merck’s political money would demonstrate the Company’s commitment to robust risk management and responsible civic engagement.
We urge a vote FOR the commonsense risk management measures contained in this proposal.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Kutxabank Gestion SGIIC SAU. Against
Rothschild & co Asset Management Against

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